Cryptocurrencies need to be regulated or they risk going out of control as more people invest in these digital assets, the head of a major Chinese bitcoin exchange platform warned on Tuesday.

Bitcoin and ethereum, two popular cryptocurrencies, have seen rapid price swings in recent months. In May, a 19 percent price fall for bitcoin saw nearly $4 billion in value wiped off. Last month, the price of ethereum crashed as low as 10 cents from around $319 in about a second on the GDAX cryptocurrency exchange. Because there's bullishness in the market, some predict bitcoin's price to soar as high as $100,000 in a decade.

"I think regulation is much needed for this new asset class because otherwise it'll run amok from society," Bobby Lee, CEO of exchange BTCC, told CNBC's "Squawk Box."

"But the challenge is how to craft the rules around this new technology," he said at the sidelines of the Rise conference in Hong Kong. Lee added, "I think it's taking the lawmakers and regulators some time to wrap their minds around it, and to come up with the appropriate rules and laws to govern companies, how we do business, to govern individuals (and) how people conduct business online."

What you need is enabling regulation from governments. Unfortunately, I don't think governments across the world are capable of acting in a selfless manner to do this. What they do try to do is extract maximum taxes, or impose strict customer identification norms (stated cause being to prevent illegal activities).

Lets see how they are going to do this + they need to find a way to put taxes.... You can track payments and all but nobody can stop you from mixing your coins. I mean what if we all turn to some privacy coin such as XMR and zcash. You can try to regulate these kind of things but at the end of the day they can't regulate it fully, I am interested to see how would this play out. We could expect that they could try to regulate it of course and we see it happening now. What will happen in like 10y from now hmmmmm....

Governments use the argument that people should give their identities to prevent illegal activities, but we all know that the biggest thieves are members of government

You don't understand it is because of terrorists and all of these terrorist organizations (which they made) use bitcoin ; they must defend them selfs! How can somebody say this governments are here to protect us, right?!?